STOCKS RALLY, DOW MAKES RECORD HIGH: Here's What You Need To Know

Germany's Lukas Podolski,
Jerome Boateng and Mesut Oezil (L-R) pose for a 'selfie' with the
World Cup trophy during celebrations to mark the team's 2014
Brazil World Cup victory.REUTERS/Alex
Grimm

Stocks rallied and the Dow made a new record high in a busy day
headlined by a merger offer from 21st Century Fox to acquire Time
Warner.

First, the scoreboard:

Dow: 17,138.20, +77.5, (+0.4%)

S&P 500: 1,981.57, +8.3, (+0.4%)

Nasdaq: 4,425.97, +9.5, (+0.2%)

And now, the top stories of
the day:

1) The day's top story was a
report first broken by Andrew Ross Sorkin and Michael De La
Merced at The New York Times, that
Rupert Murdoch's 21st Century Fox made an offer to acquire
Time Warner in a deal worth $80 billion. Time Warner
rejected the offer, and Fox issued a statement saying the two
sides are currently not in talks on a deal. The proposed deal
valued Time Warner at about $85 per share, and shares of Time
Warner surged during today's trading session, gaining more than
17% to close just below $84. Sorkin
later reported on Twitter that Time Warner might be looking
for an offer closer to $100 per share, making a deal to acquire
the HBO owner worth more like $94 billion. And following reports
of the proposed Fox-Time Warner deal,
Nuveen's Bob Doll told Business Insider that Time Warner
moved from "in play conceptually" to "in play for
real."

2) It was a busy day on the
economic data front,
headlined by the Producer Price Index, which showed that
prices grew 0.4% in June compared to the prior month,
better than the 0.2% increase that was expected. Economists were
expecting prices to rise 0.2%. Excluding the cost of food and
energy, prices rose 0.2%, which was in line with
estimates. Following the report, Ian Shepherdson at Pantheon
Macro said, "In one line: Much better core than implied by NFIB
survey; it can't last... We expected a much bigger core number in
the wake of the further increase in selling prices reported by
the NFIB... The underlying economic story here, we think, is that
firms are expecting to have to pay rather higher wages and are
seeking offsetting prices increases."

3) The National
Association of Homebuilders reported that its
homebuilder confidence index for July rose to 53 from 49 in
June, topping expectations for the index to come in at
50. Following the report, NAHB Chief Economist David Crowe said,
"As employment increases and those with jobs feel more secure
about their own economic situation, they are more likely to feel
comfortable about buying a home."

4) In
June, industrial
production growth slowed to 0.2% from 0.4% in May,
with the reading also coming in below the 0.3% growth that was
expected by economists. Following the report, Michael Gapen at
Barclays said, "Overall, and despite the slowdown in
manufacturing production in June, manufacturing production in Q2
rose by 6.7% relative to Q1. The sharp rebound in manufacturing
in February in March left the sector well positioned heading into
Q2. Following the report, our Q2 GDP tracking estimate
remained at 3.0%, in line with our revised forecast for
second-quarter growth."

5) Federal Reserve
Chair Janet Yellen was on Capitol Hill for the second
straight day,
this time speaking in front of, and taking questions from,
the House Committee on Financial Services.

6) The Federal Reserve also
released
its latest Beige Book report, a collection of economic
anecdotes from across the country. The report showed that
the economy showed "modest growth" in most of the Fed's
regions. From the Beige Book, "The pace of economic
growth was characterized as moderate in New York, Chicago,
Minneapolis, Dallas, and San Francisco, while the remaining
Districts reported modest expansion. Compared to the previous
reporting period, Boston and Richmond noted a slightly slower
pace of growth. Most Districts were optimistic about the outlook
for growth." In the Fed's St.
Louis district, The World Cup was cited as having had a
positive impact during the survey period.

7) CNBC hosted its
annual Delivering Alpha conference, which featured a
number of the biggest hedge fund managers presenting their latest
investment ideas and commentary on the markets. Among the notable
presentations was Stanley Druckenmiller, founder of Duquesne
Capital Management,
who said that his intuition is telling him the Fed's
policies have gone too far. Also presenting was Leon Cooperman,
who presented his
12 favorite stock picks, which included Citigroup and KKR,
after
last year delivering his 10 favorite stock
ideas.